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Historic Perspective

September 11, 2001

Fear of Travel

Economic Recession

MOTT Survey

Suburban Boston

Occupancy –7 Points

Avg Rate – 5%

Boston/Cambridge

Occupancy –6 Points

Avg Rate –5%

2001 Operator Forecasted Declines as a direct result of 9-11

Suburban Boston 2001

Source: Smith Travel Research

81% 84%

56%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Occupancy

1999 2000 2001

Year

Suburban Boston Monthly OccupancySeptember 1999 - 2001

Source: Smith Travel Research

71%

75%

65%

58%

60%

62%

64%

66%

68%

70%

72%

74%

76%

Occupancy

1999 2000 2001

Year

Suburban Boston OccupancyYear-To-Date Through September 1999 - 2001

Source: Smith Travel Research

$114.83

$120.45

$108.40

$50$60$70$80$90$100$110$120$130

Average Daily Rate

1999 2000 2001

Year

Suburban Boston Monthly Average Daily RateSeptember 1999 - 2001

Source: Smith Travel Research

$101.63

$109.39 $110.67

$50

$60

$70

$80

$90

$100

$110

$120

Average Daily Rate

1999 2000 2001

Year

Suburban Boston Average Daily RateYear-To-Date Through September 1999 - 2001

Source: Smith Travel Research

$92.91

$101.11

$61.07

$50

$60

$70

$80

$90

$100

$110

RevPAR

1999 2000 2001

Year

Suburban Boston Monthly RevPARSeptember 1999 - 2001

Source: Smith Travel Research

$71.95

$81.71

$71.49

$50

$55

$60

$65

$70

$75

$80

$85

RevPAR

1999 2000 2001

Year

Suburban Boston RevPARYear-To-Date Through September 1999 - 2001

Occupancy: 62% (Down 11 Points)

Average Rate: $109 (Down 2 Percent)

RevPAR: $68 (Down 17 Percent)

Suburban Boston 2001

Source: Pinnacle Advisory Group

Suburban Boston RevPAR by Quarter 1999-2001 (Forecasted)

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

Q1 Q2 Q3 Q4

Quarter

Rev

PAR

1999

2000

2001

Boston / Cambridge 2001

Source: Pinnacle Advisory Group

83% 88%

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Occupancy

1999 2000 2001

Year

Boston / Cambridge Monthly OccupancySeptember 1999-2001

Source: Pinnacle Advisory Group

76%

80%

73%

68%

70%

72%

74%

76%

78%

80%

Occupancy

1999 2000 2001

Year

Boston / Cambridge OccupancyYear-To-Date Through September 1999-2001

Source: Pinnacle Advisory Group

$228.02 $220.76

$182.84

$-

$50

$100

$150

$200

$250

Average Daily Rate

1999 2000 2001

Year

Boston / Cambridge Monthly Average Daily RateSeptember 1999 - 2001

Source: Pinnacle Advisory Group

$188.36

$195.07

$186.51

$150

$160

$170

$180

$190

$200

Average Daily Rate

1999 2000 2001

Year

Boston / Cambridge Average Daily RateYear-To-Date Through September 1999 - 2001

Source: Pinnacle Advisory Group

$188.57 $193.17

$109.52

$-

$50

$100

$150

$200

RevPAR

1999 2000 2001

Year

Boston / Cambridge Monthly RevPARSeptember 1999 - 2001

Source: Pinnacle Advisory Group

$142.21

$155.47

$135.22

$125

$130

$135

$140

$145

$150

$155$160

RevPAR

1999 2000 2001

Year

Boston / Cambridge RevPARYear-To-Date Through July 1999 - 2001

Occupancy: 69% (Down 9.5 Points)

Average Rate: $186.49 (Down 7 Percent)

RevPAR: $128.57 (Down 18 Percent)

Boston / Cambridge 2001

Source: Pinnacle Advisory Group

Boston/Cambridge RevPAR by Quarter 1999-2001 (Projected)

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

$200.00

Q1 Q2 Q3 Q4

Quarter

AD

R

1999

2000

2001

Suburban Boston 2002

Factors Affecting The Suburban Boston Lodging Market In 2002

New SupplyStill Significant (6% vs 8%)

Citywide ConventionsWorse (15 vs. 17)

The Economy Worse Than Expected

Occupancy: Up Two Points to 64 Percent

Average Rate: Down 2 Percent to $107.30

RevPAR: Down 1 Percent to $68.73

Suburban Boston 2002

Source: Pinnacle Advisory Group

Suburban Boston Occupancy by Quarter 2000-2002 (Projected)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Q1 Q2 Q3 Q4

Quarter

Occu

panc

y 2000

2001

2002

Source: Pinnacle Advisory Group

Suburban Boston ADR by Quarter 2000-2002 (Projected)

$85.00

$90.00

$95.00

$100.00

$105.00

$110.00

$115.00

$120.00

Q1 Q2 Q3 Q4

Quarter

AD

R

2000

2001

2002

Source: Pinnacle Advisory Group

Suburban Boston RevPAR by Quarter 2000-2002 (Projected)

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

Q1 Q2 Q3 Q4

Quarter

RevP

AR

2000

2001

2002

Boston / Cambridge 2002

Factors Affecting The Boston/Cambridge Market In 2002

Supply Changes

Citywide Conventions

Non-Citywide Group Demand

Corporate Demand

Leisure Travelers

Supply Changes

No Change In Short-Term2.4 Percent Increase in 20014.0 Percent increase in 2002

Projects:Hampton Inn

Commonwealth HotelNine-Zero

Embassy SuitesRenovation of Ritz Carlton

Citywide Conventions

15 Citywides (Down From 17)

Loss Of Seybold will impact April

Now 2Q Looks Weak (In addition to 1Q)

Non-Citywide Group Demand

In-House Group Pace is now off

Pace Improves in 2H 02 (with economy?)

Cambridge pace is not expected to improve

Corporate Demand

Slow Recovery

Lack of compression from groupswill limit ability to drive rate

No Forecasted Economic Growth Until 2H ‘02

Leisure Demand

“All About Rate”

Increased Supply in Suburbs

Decline In International Travel

Occupancy: Up 1 Point to 70 Percent

Average Rate: Up 1 Percent to $189

RevPAR: Up 3 Percent to $131

Boston / Cambridge 2002

Source: Pinnacle Advisory Group

Boston/Cambridge Occupancy by Quarter 2000-2002 (Projected)

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Q1 Q2 Q3 Q4

Quarter

Occu

panc

y 2000

2001

2002

Source: Pinnacle Advisory Group

Boston/Cambridge ADR by Quarter 2000-2002 (Projected)

$-

$50.00

$100.00

$150.00

$200.00

$250.00

Q1 Q2 Q3 Q4

Quarter

AD

R

2000

2001

2002

Source: Pinnacle Advisory Group

Boston/Cambridge RevPAR by Quarter 2000-2002 (Projected)

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

$200.00

Q1 Q2 Q3 Q4

Quarter

ADR

2000

2001

2002

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